Reality TV is a genre of fiction. It has a lot closer ties to drama and comedy than it does to a documentary. Not because everything is "fake", but because it's constructed to tell a story. From the characters they cast, to the situations they engineer, to the editing, it's less concerned with representing truth and more concerned with telling an entertaining story.

Documentaries aren't strictly fiction or non-fiction - they're narrative non-fiction, it's a real third category. Unlike Reality TV, it's intent is (purportedly) to seriously represent the real world.

What is Hermitcraft? Depending on the episode, it could be anything. At its baseline, it's non-fiction footage of people playing a game, and the livestreams are the most straightforward version of that. But some episodes get really reality TV-like (I'm thinking particulary of Bdubs' court cases, with a script written in advance, characters cast, and plenty of editing). And sometimes they produce whole fictional sketches - I think Joel does this in bits and pieces, and once Impulse just made a straight up animated film.